Pharma breakup followers, take note: Abbott Laboratories ($ABT) has unveiled its first-draft documents for the AbbVie spinoff. In a letter to shareholders filed with the Securities and Exchange Commission, Abbott discloses its management team, sets forth pro forma financials, and runs down the trends on product sales.
AbbVie's strengths? Abbott CEO Miles White points out that it's a high-margin business. In fact, according to the letter, the pharma business delivered gross margins of 73.4% on net sales in 2011, 72.5% in 2010, and 71.5% in 2009. Not too shabby. The company's 2011 revenue amounted to $17.4 billion, an 11.6% increase from 2010.
AbbVie also boasts an experienced management team, the letter says. Previously announced CEO Richard Gonzalez will be backed up by Abbott's current licensing chief William Chase as CFO; Abbott general counsel Laura Schumacher in the same role; Abbott's pharma R&D chief, John Leonard, as SVP for R&D; and commercial operations chief Carlos Alban as SVP for the same function at AbbVie.
Then there's strong cash flow: $6.2 billion in 2011, with expectations of stable cash flow in the future, to help fund, among other things ... cash dividends to investors.
That cash flow comes, of course from another strength, according to the letter: a strong product portfolio. Particularly Humira, which leads us to one of AbbVie's key growth strategies. The company aims to expand Humira sales by adding new indications and pushing uptake in patient populations where biologics use is low, particularly in international markets. Another growth strategy follows directly from that; AbbVie, like its Big Pharma rivals, plans to keep pushing into emerging markets, including the BRIC countries, of course, but also Mexico and Turkey.
As required by SEC rules, it offers a litany of warnings against the potential pitfalls, risks, and competitive challenges the new standalone pharma company will face--everything from the danger that development partners might flake out to the prospect of biosimilar competition to the potential for unexpected safety problems with one of its marketed drugs.